Carlsberg sales affected by Russia-Ukraine tensions

<p>Carlsberg has seen sales drop between six and seven per cent in Russia.</p>

Ongoing tensions between Russia and Ukraine have begun to impact on the beer market.

Danish brewer Carlsberg announced a significant dip in sales across both countries and warned that it is expected to affect its yearly profits. The company stated that beer volumes in Russia had declined by between six and seven per cent while in Ukraine this figure had dropped by ten per cent.

Officials stated that Russia had experienced a downturn in the second quarter of the year due to the "uncertain macroenvironment" and "weak economic development". These figures comes despite Carlsberg's Baltika beer brand being the largest selling beer in Russia. However, the brand saw its market share fall by 1.2 per cent to 37.4 per cent over the course of the quarter. This was attributed to the introduction of smaller packs.

Jorgen Buhl Rasmussen, Carlsberg chief executive, said: "In Eastern Europe, our teams are doing an excellent job mitigating the impact of the current market challenges.

"Unfortunately, we believe the Eastern European beer markets will be impacted further as consumers are facing increased challenges and this will impact the group's profits negatively this year."

Away from Eastern Europe, Carlsberg had recorded a four per cent increase in organic net revenue while organic gross profit growth had also increased by six per cent. Its beer volume performance in Western Europe had once again been strong with its premium brands such as Tuborg, Somersby and Grimbergen delivering positive growth.

Tensions between Russia and Ukraine have led to the former being hit with increased sanctions from the European Union, US and other nations. Russia recently responded by imposing a full embargo on food imports with these selected nations. It has sparked fear of job losses in certain sectors which conduct a lot of business with Russia and has relied on it for imports.

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